Why Should I Hire a Fee-Only Financial Advisor?

As you get older, busier and hopefully wealthier, your financial goals get more complicated.

A fee-only financial advisor is paid directly by the client on a transparent and pre-arranged payment plan.  This can be an hourly or project rate, monthly retainer, or percentage of investments managed.

Fee-only financial planners are registered investment advisors with a fiduciary responsibility.  As a potential client, you should be concerned whether or not an advisor is recommending a certain product because it helps their bottom line more than it helps yours.  There are some registered reps that are given additional compensation for selling certain products offered by their employer.

A fee-only financial advisor offers an objective view and generally more comprehensive advice.  Services can be tailored to addressing a specific financial question. Fees are provided up front and are not based on product sales, allowing a fee-only advisor more time to focus on advice than what product to sell.

The professional organization for fee-only advisors, the National Association of Personal Financial Advisors (NAPFA) requires members to adhere to a higher set of standards.

• Meet stiff ethical, credentialing and educational requirements.
• Be primarily engaged as a holistic financial advisor (rather than merely an investment or tax advisor).
• Meet the most rigorous continuing education requirements in the industry.
• Submit to outside professional review, to ensure there are no conflicts of interest created by commissions.
• Submit a financial plan for review by peers, before being admitted as a member.

There are other advisors that are not considered fee-only.  They are paid through other sources including by the companies they recommend.  For example, if the planner sells you a specific investment, mutual fund, insurance or other products, they receive a commission or partial commission from the company.  This situation does not always work in your best interest and you may want to avoid a salesperson that could be out for personal gain.

Ultimately, you want to choose a fee-only planner who will be loyal to you and your interests.  You’ve come to the right place to begin your search.

Shore Financial Planning’s founder Joseph Vecchio has over 20 years of experience in finance. Joe began his investment career as a professional trader and money manager. During his years on Wall Street, the keys to his success were his abilities to manage risk, analyze markets and companies, and continually adapt his trading strategies to technological, competitive, and regulatory pressures. He now uses these skills to ensure he is making the best decisions for his clients.